PERTH (miningweekly.com) – Junior Renascor Resources has tapped a staged development as the most economical for its Siviour graphite project, in the Eyre Peninsula of South Australia.
A Stage 1 development will deliver 10 800 t/y of graphite, for a capital cost of A$15.9-million, with production slated to start in 2019.
The Stage 2 project is expected to start production in 2022, and will increase production to 123 000 t/y at a capital cost of A$138-million.
Renascor told shareholders on Friday that the staged development offered a reduced start-up capital, compared with the 123 000 t/y operation considered in the May scoping study, which estimated a pre-production capital investment of A$144-million.
The staged development would also allow the company to develop a customer base, which would support the capital requirement needed to fund the larger scale, Stage 2 operation.
Meanwhile, the staged development also increased the projected mine life from the 20-years considered in the scoping study, to 23 years, while the project’s net present value decreased from A$551-million to A$370-million and its internal rate of return decreased from the 59% achieved in the scoping study, to 46%.
“The results of the recent studies show that Siviour offers impressive returns at a range of production levels. The staged approach offers a potential lower-risk alternative to a large-scale start-up by taking advantage of some of the key strengths of Siviour,” said Renascor MD David Christensen.
“Pre-production capital costs are minimised due to the project’s proximity to South Australia’s established infrastructure, and Siviour’s shallow, flat-lying orientation keeps projected operating costs competitive, with Stage 1 getting an additional benefit as mining commences in a near-surface, high-grade zone.”
Christensen said that as the company moved towards completing the prefeasibility study and advancing discussions with potential offtake and finance partners, it would actively consider all viable options for bringing the Siviour project into production.